Unlocking innovation through manufacturing supply chain network structure

Purpose This study seeks to elucidate how manufacturing firms’ structural positions in the large-scale supply chain network (SCN) and their digitalization influence innovation. It opens the “black box” of digitalization by examining its moderating effects through three distinct dimensions: digital strategy, organizational readiness and digital technology investment. Design/methodology/approach Using annual report data, this study constructs large-scale SCNs from 2013 to 2021, obtaining 11,789 firm-year observations involving 2,269 listed manufacturing firms. Bonacich power centrality and structural hole abundance are utilized to measure and test the influence of network positions on innovation outcomes. Digitalization’s decomposed moderating mechanisms are then tested. Findings Both network position indicators (i.e. network centrality and structural hole abundance) significantly enhance innovation performance. Digital technology investment primarily drives digitalization’s positive moderating effect on the relationship between network position advantages and innovation, while digital strategy and organizational readiness play more limited roles. Originality/value This study contributes to SCN and firm digitalization research by combining resource dependence theory, social network theory and dynamic capabilities theory. The findings provide insights for manufacturing firms, especially non-state-owned ones, to guide their strategic decisions regarding their network positions and levels of digital technology investment.